KS Bancorp, Inc. (the “Company”) (OTCBB: KSBI), parent company
of KS Bank, Inc. (the “Bank”), today announced unaudited fourth
quarter and year to date financial results for the 2009 fiscal
year.
The Company reported a net loss of ($378,000), or ($0.29) per
diluted share, before adjusting for the effect of preferred stock
dividends and accretion of discount on preferred stock for the
three months ended December 31, 2009, compared to a net loss of
($414,000), or ($0.31) per diluted share, for the same period in
2008. After adjusting for $35,000 in dividends and accretion of
discount on preferred stock, the net loss available to common
stockholders for the current period was ($413,000), or ($0.32) per
diluted share. For the three months ended December 31, 2009 net
interest income improved to $2.6 million, compared to $2.2 million
for the prior year period, primarily due to a decrease in cost of
funds. Comparing the fourth quarter of 2009 to 2008, there was a
slight increase of $10,000 in noninterest income. Noninterest
expenses increased $489,000 from $2.3 million at December 31, 2008
to $2.8 million at December 31, 2009. The increase is primarily
attributable to the cost of foreclosures, as well as the cost to
maintain the properties.
For the year ended December 31, 2009, the Company reported a net
loss of ($210,000), or ($0.16) per diluted share, before adjusting
for the effect of dividends and accretion of discount on preferred
stock, compared to net income of $663,000, or $0.51 per diluted
share, for the year ended December 30, 2008. After adjusting for
$62,000 in dividends and accretion on preferred stock, the net loss
available to common stockholders was ($272,000), or ($.21) per
diluted share, for the twelve months ended December 30, 2009.
The Company’s consolidated total assets increased $24.0 million
to $348.8 million as of December 31, 2009, as compared to $324.8
million at December 31, 2008. Net loan balances have decreased
$17.2 million from $244.3 million at December 31, 2008 compared to
$227.1 million at December 31, 2009. In 2009, management focused on
the reduction of the Bank’s concentration in residential
speculative construction lending, which is the primary result of
the decrease in loan balances. Total deposits were $259.0 million
at December 31, 2009, compared to $242.4 at December 31, 2008,
which reflects a $16.8 million increase. During the year, demand
deposits grew 7.04% from $64.0 million at December 31, 2008 to
$68.6 million at December 31, 2009. The investment portfolio
increased $32.5 million, from $54.6 million at December 31, 2008,
to $87.1 million at December 31, 2009. The increase in the
investment portfolio is primarily the result of implementing a
leverage strategy designed to offset the impact of the preferred
stock dividends paid on the investment pursuant to the Capital
Purchase Program. Total stockholders’ equity increased 26.06%, from
$17.7 million at December 31, 2008, to $22.4 million at December
31, 2009.
Nonperforming assets, which includes nonaccrual loans and
foreclosed assets, totaled $15.3 million at December 31, 2009,
versus $8.5 million at December 31, 2008. The nonperforming assets
consist of $9.4 million in foreclosure assets and $5.9 million in
nonaccrual loans. As a result of the increase of the nonperforming
assets, year to date the Company recorded $2.2 million in provision
for loan losses. Net charge offs for the year were $2.0 million.
The allowance for loan losses at December 31, 2009 totaled $3.9
million, or 1.70% of loans. Nonperforming loans and charge-offs are
primarily related to our residential speculative construction and
lot development portfolio, which has been negatively affected by
the slowing housing market. Although the nonperforming assets have
increased since December 31, 2008, they peaked during the third
quarter of 2009 and have continued to decrease during the last
quarter of 2009. During 2009 the Bank has successfully sold $2.9
million of its foreclosed asset inventory. The Company believes the
allowance for loan losses is adequate to cover any additional
losses.
Commenting on the fourth quarter 2009 results, Harold Keen,
President and CEO, stated, “KS Bank, like all banks, began 2009
with many challenges. In the beginning of the year, the Bank had a
high concentration in speculative residential construction. Our
team worked relentlessly this year to effectively reduce this
concentration. Although, we did experience a net operating loss for
the year, we began to experience some stability in the market and
positive trends in the final quarter of the year. KS Bank continues
to be well-capitalized according to regulatory guidelines.”
The Company also announced today that its Board of Directors
voted not to declare a common stock dividend for the fourth quarter
of 2009. The continued suspension of our quarterly dividend is a
prudent step in preserving capital during this continuing economic
downturn. The Board of Directors will continue to monitor business
conditions, the Company’s profitability and capital levels, as well
as asset quality in considering whether to resume cash dividend
payments. The Bank continues to be well-capitalized according to
regulatory guidelines, and we continue to be focused on serving the
communities in which we are located.
KS Bancorp, Inc. is a Smithfield, North Carolina-based single
bank holding company. KS Bank, Inc., a state-chartered savings
bank, is KS Bancorp’s sole subsidiary. The Bank is a full service
community bank serving the citizens of eastern North Carolina since
1924 and offers a variety of financial products and services
including a securities brokerage service through an affiliation
with a registered broker/dealer. There are nine full service
branches located in Kenly, Selma, Clayton, Garner, Goldsboro,
Wilson, Wendell, Smithfield, and Four Oaks, North Carolina. For
more information, visit www.ksbankinc.com.
This release contains certain forward-looking statements with
respect to the financial condition, results of operations and
business of the Company. These forward-looking statements involve
risks and uncertainties and are based on the beliefs and
assumptions of management of the Company and on the information
available to management at the time that these disclosures were
prepared. These statements can be identified by the use of words
like “expect,” “anticipate,” “estimate” and “believe,” variations
of these words and other similar expressions. Readers should not
place undue reliance on forward-looking statements as a number of
important factors could cause actual results to differ materially
from those in the forward-looking statements. The Company
undertakes no obligation to update any forward-looking
statements.
KS Bancorp, Inc. and SubsidiaryConsolidated Statements of
Financial Condition December 31, 2009
December 31,
(unaudited) 2008*
(Dollars in thousands)
ASSETS Cash and due from
banks: Interest-earning $ 3,017 $ 3,116 Noninterest-earning 1,325
1,550 Time Deposit 100 100 Investment securities available for
sale, at fair value 87,272 54,588 Federal Home Loan Bank stock, at
cost 3,079 3,008 Presold mortgages in process of settlement - 924
Loans 231,090 248,097 Less Allowance for loan losses
(3,942 ) (3,753
) Net loans 227,148 244,344 Accrued interest
receivable 1,825 1,672 Foreclosed assets, net 9,427 2,450 Property
and equipment, net 9,237 9,665 Other assets
6,398 3,371
Total assets
$ 348,828
$ 324,788 LIABILITIES
AND STOCKHOLDERS' EQUITY Liabilities Deposits $ 259,169
$ 242,366 Short-term borrowings 11,658 5,084 Long-term borrowings
54,048 58,048 Accrued interest payable 448 528 Accounts payable and
accrued expenses
1,154
1,032 Total liabilities
326,477 307,058
Stockholder's Equity: Non-cumulative perpetual preferred
stock (Series A), no par value4,000 shares authorized, issued and
outstanding $ 4,000 $ - Non-cumulative perpetual preferred stock
(Series B), no par value200 shares authorized, issued and
outstanding 200 - Common stock, no par value, authorized 20,000,000
shares;1,309,501 shares issued and outstanding in 2009 and 2008
1,607 1,607 Retained earnings, substantially restricted 16,577
17,117 Accumulated other comprehensive loss
(33
) (994 ) Total
stockholders' equity
22,351
17,730 Total liabilities and
stockholders' equity
$ 348,828
$ 324,788 * Derived from
audited financial statements
KS Bancorp, Inc and Subsidiary
Consolidated Statements of Income (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008
2009 2008 (In thousands, except per share
data)
Interest and dividend income: Loans $ 3,616 $
3,885 $ 14,447 $ 16,783
Investment securities
Taxable 435 295 1,328 1,203 Tax-exempt 516 355 1,642 1,387
Dividends 5 7 10 116 Interest-bearing deposits
- 4
5 43 Total interest
and dividend income
4,572
4,546 17,432
19,532 Interest expense: Deposits
1,392 1,781 5,811 7,607 Borrowings
554
615 2,314
2,478 Total interest expense
1,946 2,396
8,125 10,085
Net interest income 2,626 2,150 9,307 9,447 Provision for
loan losses
1,135
1,193 2,218
1,396 Net interest income after
provision for loan losses
1,491
957 7,089
8,051 Noninterest income: Service
charges on deposit accounts 331 327 1,311 1,347 Fees from presold
mortgages 81 93 454 343 Gain (Loss) on sale of investments - - 104
13 Other income
66
48 212
180 Total noninterest income
478 468
2,081 1,883
Noninterest expenses: Compensation and benefits 1,404 1,295
5,618 5,811 Occupancy and equipment 240 284 1,019 1,021 Data
processing & outside service fees 218 202 844 790 Advertising
20 35 74 169 Net foreclosed real estate 255 34 275 174 Other
635 433
2,404 1,570 Total
noninterest expenses
2,772
2,283 10,234
9,535 Income (loss) before income taxes
(803 ) (858 ) (1,064 ) 399 Income tax (benefit) expense
(425 ) (444
) (854 )
(264 ) Net income (loss)
(378 ) (414
) (210 )
663 Dividends on preferred stock (27 ) -
(50 ) - Accretion of discount on preferred stock
(8 ) -
(12 ) - Income
(loss) available to common stockholders
$
(413 ) $ (414
) $ (272 )
$ 663 Basic and Diluted
earnings (loss) per share
$ (0.32
) $ (0.31 )
$ (0.21 ) $
0.51 Dividends per common share
$ - $
0.06 $ 0.13
$ 0.52
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